Author: Zhou, ChainCatcher

As the crypto market enters a correction window, the actions of Bitcoin treasury firms have become noticeably divergent. Strategy, a major player, announced last week that it spent $962.7 million to acquire 10,624 bitcoins at a price of $90,615 each. In contrast, Metaplanet, the fourth-largest Bitcoin treasury firm, has halted its acquisitions, not making any purchases for the tenth consecutive week since September 30th.

Metaplanet, a Japanese publicly traded company hailed by the market as the "Asian version of MicroStrategy," was once a radical player in the DAT (Digital Amount and Bitcoin) sector. Since launching its reserve program in April 2024, the company has rapidly accumulated over 30,000 Bitcoins, with a total value of approximately $2.75 billion.

However, since the fourth quarter, the price of Bitcoin has fallen nearly 30% from its all-time high of $126,000. Just when the market generally expected treasury companies to take advantage of the low prices to buy, Metaplanet unexpectedly paused its last purchase on September 29 and instead shifted its short-term capital focus to stock buybacks.

DAT shifts from aggressive accumulation to risk control priority

Data shows that the total market capitalization of digital asset treasury stocks shrank dramatically from $150 billion to $73.5 billion in the fourth quarter, with most companies' mNAV falling below 1. According to Bloomberg, the share prices of US and Canadian listed crypto asset treasury (DAT) companies have fallen sharply this year, with a median decline of 43% and some companies experiencing drops exceeding 99%.

Galaxy warns that Bitcoin Treasury is entering a "Darwinian phase," with stock premiums collapsing, leverage turning to decline, DAT stock turning to a discount, and the core mechanisms of its once-thriving business model crumbling.

Against this market backdrop, ETHZilla, another second-tier treasury firm, recently announced that it will redeem $516 million in convertible bonds ahead of schedule. This move is seen as a positive signal of simplifying its capital structure, enhancing financial flexibility, and reducing the risk of high-interest debt during market downturns.

Metaplanet's actions echo this trend. Currently, the company has $304 million in outstanding debt, and theoretically, it has nine times that amount in Bitcoin assets as a guarantee for repayment. However, the company has chosen to suspend further acquisitions, a move that is highly consistent with the current industry trend in the DAT sector, which is shifting from aggressive accumulation to a risk-control-first approach.

Stock price pressure and tactical adjustments under conservative accounting

Previously, influenced by Bitcoin holding strategies, Metaplanet's stock price surged from $20 in April 2024 to a peak of $1,930 in June 2025. Although the stock price has fallen sharply by more than 70% since the second half of the year, it still recorded an overall increase of more than 20% this year, and the current stock price is stable at around $420, with a total market value of approximately $3 billion.

In response to the continued decline in stock price, Metaplanet CEO Simon Gerovich publicly addressed the stock price volatility on October 2. He cited the example of Amazon during the dot-com bubble, emphasizing that fundamentals and stock prices often diverge, and reiterated that the company will continue to accumulate Bitcoin.

Previously, he stated in September that if the net asset value is lower than the market capitalization (mNAV is less than 1), continuing to issue new shares would "mathematically destroy value" and be detrimental to the company's BTC yield. The company would prioritize evaluating options such as preferred stock and stock buybacks.

Therefore, when it fell below net asset value in early October, Metaplanet acted swiftly. First, it announced a buyback of up to 150 million shares and secured a $500 million credit line. Then, it raised $100 million by pledging its Bitcoin assets to purchase more Bitcoin, expand its revenue business, and repurchase shares. Some of the funds will also be used for revenue business. Currently, the company's mNAV has recovered to more than 1.

Therefore, suspending share purchases is a tactical protection of its stock price and balance sheet health, prioritizing the value of existing shareholders rather than blindly expanding the balance sheet.

Furthermore, halting the purchases was also to mitigate the risks associated with Japan's conservative accounting standards. Given its average Bitcoin cost of approximately $108,000, the company had accumulated over $500 million in unrealized losses on its books. To prevent an excessive shock to its short-term profit statement, it chose to proactively avoid exacerbating this risk of book impairment.

Building an Asian "moat" by leveraging low interest rates?

On the surface, suspending share purchases appears to be a defensive move, but Metaplanet's true strategic intention may lie in upgrading and innovating its capital structure.

The company's third-quarter financial report shows that its sales reached 2.401 billion yen, a 94% increase quarter-on-quarter; operating profit was 1.339 billion yen, a 64% increase; net profit was 12.7 billion yen; and net assets were 532.9 billion yen, a 165% increase. Among these, the options business contributed $16.28 million in revenue, a 115% year-on-year increase, which can cover daily operations and interest costs.

Building on this, Metaplanet is also attempting to emulate Strategy by planning to issue preferred stock similar to STRC in order to obtain capital more efficiently.

The company plans to launch two new digital credit instruments, "Mercury" and "Mars." "Mercury" will offer a 4.9% yen yield, approximately ten times the yield of Japanese bank deposits. 73% of the funds will be earmarked for Bitcoin accumulation, including $107 million in direct purchases and $12 million in options trading. This allows the company to bypass equity dilution and shift to low-cost debt leverage, making it highly attractive to domestic investors.

Furthermore, Japan prohibits market sales mechanisms (similar to BitMine's current ATM model) to prevent listed companies from "dumping" shares directly on the secondary market in real time, thus protecting investors from dilution effects. Metaplanet cleverly circumvents this restriction by employing a mobile warrant (MSW) mechanism, while retaining the core advantage of flexible fundraising.

MSWs are essentially a special type of stock buyout warrant, characterized by their exercise price not being fixed but dynamically adjusted periodically. Typically, every few trading days (every three trading days for early Metaplanet series), the exercise price is reset to the average of the closing prices of the previous few days, such as the simple moving average of the previous three days. Thus, when a warrant holder chooses to exercise the warrant, the company issues new common stock at a price close to the current market price, raising funds.

In the future, the company may integrate this mechanism into its perpetual preferred stock product Mercury: preferred stockholders can convert to common stock at a dynamic price through conversion terms similar to MSW, thereby making the entire financing process smoother and more controllable.

Meanwhile, MicroStrategy Executive Chairman Michael Saylor has confirmed that the company will not launch a similar product in Japan within the next 12 months, providing Metaplanet with a valuable 12-month first-mover advantage in the market.

On November 20, the company successfully issued $150 million in Class B perpetual preferred stock, marking the beginning of the implementation of its financing strategy. These actions demonstrate that Metaplanet is leveraging Japan's low-interest-rate environment to build a unique financing "moat" for structural and sustainable expansion.

Local advantages and MSCI review

In fact, Metaplanet's core value lies in the unique alpha provided by its Japanese ecological environment:

On the one hand, the continued depreciation of the yen has strengthened Bitcoin's role as an inflation hedge, and Metaplanet's Bitcoin reserves provide Japanese domestic investors with an effective way to combat the decline in the yen's purchasing power.

On the other hand, the tax-free advantage of Japanese personal savings accounts (NISA accounts) has attracted 63,000 Japanese shareholders to Metaplanet. Compared to the 55% capital gains tax on direct holding of crypto assets, investors can indirectly gain exposure to BTC at a lower cost by buying Metaplanet shares through NISA.

As a result, Metaplanet has gained recognition from international institutions. Capital Group increased its stake to 11.45%, becoming Metaplanet's largest shareholder. Currently, the top five shareholders also include MMXX Capital, Vanguard, Evolution Capital, and Invesco. Richard Byworth, a partner at Syz Capital, publicly withdrew funds from MicroStrategy and the Bitcoin ETF to invest in Metaplanet, believing that the latter has lower financing costs and higher return flexibility.

An industry observer pointed out that companies like Metaplanet must prioritize ensuring financial resilience during downturns in order to maintain their long-term growth goals.

However, despite its long-term structural health benefits, Metaplanet still faces potential short-term selling pressure. For example, the MSCI index exclusion review affecting Strategy has also impacted Metaplanet, which was included in the MSCI Japan Index in February of this year. If it is excluded due to its excessively high proportion of Bitcoin assets, it could trigger a wave of selling by passive funds.

Conclusion

In summary, Metaplanet's pause in increasing its Bitcoin holdings is not a failure of strategy or a capitulation to the market. It can be seen as a strategic build-up based on risk and efficiency considerations, and it also marks the maturation of the DAT sector, shifting from aggressive accumulation to a risk-control-first approach.

Bitwise Chief Investment Officer Matt Hougan has stated that using mNAV to value DAT is incorrect because this valuation method does not consider the life cycle of a publicly traded company. The reasons for DAT's discounted trading are largely certain, while the reasons for its premium are often uncertain. Looking ahead, price differences among treasury companies will become more pronounced, and Metaplanet may be reshaping its valuation system.

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